Utility Week

UTILITY WEEK | 25TH - 31ST MAY 2018 | 21 Operations & Assets O ver the past few years, there has been a lot of talk in the energy sector about how blockchain will revolutionise and disrupt the industry status quo. For some, blockchain, which is based on the principle of a single distributed ledger or database in which all transactions are recorded securely and publicly, is the key to unlocking a more decentralised grid with hundreds of thousands of households gener- ating and selling their own electricity. But to the doubters, blockchain remains something of an overhyped enigma, with plenty of unanswered questions around whether it can securely deliver at scale and at cost. Demonstrating blockchain's power At present, there are a number of blockchain tests and trials going on in the energy sec- tor. The largest of these is orchestrated by the Energy Web Foundation (EWF), a not- for-profit organisation supported by a large cross-section of European utilities and tech- nology companies, which aims to accelerate the creation of a common platform for run- ning energy industry blockchain applica- tions at scale. EWF's test network was launched last year and in October an update was launched to allow it to handle 750 transactions a second. "In about a year's time, we intend to release the genesis block of the chain, which will mean it will be a living, thriving system on its own," says the foundation's principal and co-founder, Jesse Morris. But while EWF is working to create a shared industry foundation for blockchain applications, individual companies are not hanging back with pilots to develop their own bespoke blockchain solutions. Across the UK, utilities are launching blockchain experiments and pilot schemes le, right and centre. A significant propor- tion of such projects are targeted at enabling peer-to-peer trading, which many believe is the realm in which blockchain can offer the biggest dividends. Earlier this month, Centrica announced it was joining forces with the US company LO3, which is also behind the Brooklyn Microgrid platform, to look at how blockchain can be used to buy and sell energy in the UK. As part of the trial, a local energy market among 200 businesses and homes will be tested in Cornwall, using LO3's Exergy platform. And in April, the tech start-up Verv announced it had completed the first peer- to-peer trade on its test blockchain platform on Hackney's Bannister housing estate. Samuel Pachoud, a senior manager at EY, says blockchain's ability to eliminate the substantial costs involved in trading electricity is what makes it so promising as a peer-to-peer market enabler. Currently, a high price to play makes it "highly impractical" for homeowners to take control of their own energy trading. But with blockchain, such barriers could be signifi- cantly reduced, freeing up the potential for individuals to manage trading and payments for small-scale generators, battery storage systems and electric vehicles, all of which could help to balance supply and demand in real time, as well as empowering so-called prosumers. "We have a very cumbersome and com- Blockchain and the water sector The vast majority of existing pilot schemes and innovation projects trailing how blockchain can help solve utility industry challenges are taking pace in the energy sector. But as appreciation of the disruptive potential of blockchain grows and the technology matures, the water sector too is getting interested. In 2017, a Digital Strategy Committee was established by the non-domestic water retail market operator MOSL to ensure the full potential of emerging technologies was being recognised and harnessed by participants. Blockchain rapidly became a key focal point for the committee, which is chaired by Bristol Water's Nick Rutherford. At an exclusive industry workshop on 18 June – Understanding Block- chain for UK Utilities – Rutherford will share the committee's early thoughts on the highest value use cases for blockchain in the competitive water sector and how these will be tested. This workshop is part of an ongoing schedule of events run by Utility Week and Wipro for the Technology and Innovation Council, a pan-utility community of technology and innovation leaders. To find out more about the council or enquire about attendance at its events, please contact Elaine Munn: elainemunn@fav-house.com Insight report Blockchain breakthrough? Blockchain is a software technology that promises to enable the mass market trading of energy, but how close are we to a financially viable, as well as technically feasible, solution? Brought to you in association with plex value chain with different players, retailers, settling companies and trading platforms," Pachoud tells Utility Week. "Blockchain can simplify the relationship between the provider and the user. Every- one will be able to participate in the market and not just be able to buy and sell power with your neighbour, but with anyone in the market." PwC's energy blockchain lead for the UK and partner Steve Batt says the technology also has the potential to speed up and increase the accuracy of energy settlements, because "it offers greater transparency and accuracy of data between counterparties and industry participants". "We have a simple test that we use with clients," says Batt. "We say there are six things to check and you need to have four of them in order for blockchain potentially to be a solution to your problem. "Blockchain can work for you if there are multiple parties that share data; you need to validate data; there needs to be trust among people; there are intermediaries that add to complexity and taking them out might reduce cost and complexity; there are time- sensitive interactions and people have to interact with each other quite frequently.

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